The Number of Firms in a Monopolistically Competitive Market Means

question 297

Multiple Choice

The number of firms in a monopolistically competitive market means that

• A) all firms will have substantial monopoly power since there are so few firms in the industry.
• B) each firm has a relatively small share of the total market since there are many firms in the industry.
• C) the firms will be likely to collude since there are only a few firms in the industry.
• D) firms will have a hard time earning non-negative profits since there are many firms in the industry.